Standard & Poor's Ratings Services (S&P) - a division
McGraw Hill Financial, Inc.
) - has upgraded its outlook on
). The rating agency has revised the company's outlook to
Positive from Stable, while affirming 'A+/A-1' issuer credit
ratings and senior unsecured rating of 'A+'.
BLACKROCK INC (BLK): Free Stock Analysis
MCGRAW HILL FIN (MHFI): Free Stock Analysis
NOAH HLDGS LTD (NOAH): Free Stock Analysis
VIRTUS INVESTMT (VRTS): Free Stock Analysis
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S&P's outlook upgrade is based on BlackRock's efforts to
improve leverage ratio and its robust financial performance over
the past few quarters. Over the last one year, the company repaid
approximately $1.35 billion of debt.
In Dec 2012, BlackRock repaid $500 million of maturing long-term
debt from issuance of debt in May 2012. Further, in the first
quarter, the company repaid $100 million of short-term
borrowings. Moreover, in May this year, BlackRock paid back $750
million of maturing debt from cash available in hand. Thus, the
company's total borrowing is at present below $5.0 billion,
compared with $6.3 billion in Jun 2012.
Additionally, S&P's outlook affirms its belief in BlackRock's
ability to redeem roughly $1.0 billion of debt maturing in Dec
2014, without any extra debt issuance. Further, if the company's
earnings momentum and strong cash flow generation continue, the
rating agency could raise BlackRock's credit ratings as well.
S&P stated that BlackRock's current ratings indicate the
company's leading position and unmatched range of asset
management operations. As of Mar 31, 2013, assets under
management (AUM) were $3.9 billion, up 7% year over year.
For BlackRock, the outlook upgrade is a catalyst. Further, the
company's enhanced capital deployment activities and acquisition
plans will prove accretive to its overall performance.
BlackRock's initiatives to improve market share in the ETF
business is also commendable.
Currently, BlackRock carries a Zacks Rank #3 (Hold). Better
performing stocks include
Noah Holdings Limited
Virtus Investment Partners, Inc.
), both of which have a Zacks Rank #1 (Strong Buy).